Why Is It A Good Thing To Keep My Old Credit Cards Around

Category: Finance, Credit.

Some people believe that cancelling old credit cards is a good thing.

But how come when they check their credit score after they have cancelled those credit cards and closed their old accounts they only find that their credit score has actually gone down? A burden lifted off their shoulders. Was it not a good thing that they could get out of debt by paying off those old credit cards, and close them out so that they would not have to worry about those bills ever again? But cancelling old credit cards and closing those accounts will not. Actually, paying off your credit cards is a good thing, and it will improve your credit score. Should I keep my old credit cards, even if I' m not going to use them anymore?

Perhaps you feel that having so many credit cards is not healthy and will tempt you to spend money that you don' t have. Having old accounts is a good thing, even if they are inactive. If this is the case, it would be wiser for you to pay off and cancel your newer credit cards. Either way, having old accounts open will help your credit score to stay at a high level. That way you will still have the cards that provide proof of your lengthy credit history, and you do not have the temptation to get into debt that you cannot escape. If I close my old accounts, won' t it repair the negative records on my credit report?

Why? It does not really matter whether you pay off, and forget all, close out about your old credit cards, you are still going to have those negative records, such as late payments, on your credit report. Those mistakes can stay on your report for up to ten years, only time will, and honestly eventually erase them. Why is it a good thing to keep my old credit cards around? It is just better not to make those kind of mistakes in the first place, because closing the accounts that you paid late on will not make those mistakes go away. Having newer credit cards is beneficial because they may have better interest rates. But what about the old ones?

In a way you have a chance to start over at a smaller interest rate without suffering the consequences, like increased interest rates, of the late payments you have made on your old credit cards. Honestly, they can be more beneficial to you than the new credit cards, not necessarily when it comes to interest rates, but concerning your credit history. Cancelling these old credit accounts sort of erases the proof of your credit history, making you appear less experienced in the credit card realm, and therefore more likely to make late payments. Having an old credit card attests to your long and healthy credit history, and gives you more esteem because you have experience with credit cards. This appearance will obviously lead to a low credit score when you really deserve a higher one.